Imports way off as COVID-19 slams into U.S.-China trade
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China may be the only economy in the world returning to “normal,” but it’s import picture still looks pretty bad — down 14% according to new numbers Thursday.
As far as buying American goods, China is way off track in terms of import targets Beijing agreed to in its trade deal with Washington, signed in January. Of course, the pandemic slammed both economies, but already President Donald Trump is threatening to kill the deal and raise more tariffs. The two countries plan to meet on trade issues next week.
Typically, trade deals reduce tariffs and then let capitalism figure out who buys what and how much. But the U.S.-China deal has a target that China buy an average $12 billion in American goods each month.
Right now, the actual imports are less than half that, according to S&P’s Global Market Intelligence. Chris Rogers, a contributor to S&P Global, said China hardly bought anything when the pandemic hit there.
“While the economy was locked down, that of course was going to trim a lot of demand,” Rogers said. “That demand will have picked up in late March, but of course American manufacturing and American farmers and American energy producers aren’t there.”
There to make stuff, or transport it, during our disease peak. Case in point: the meatpacking plants shutting down, as workers got sick from the virus.
U.S. exports of cars to China fell, as did soybeans, which tend to trade in the winter and spring.
“Both sides are having the outbreak in the peak demand season for soybean exports,” said Wendong Zhang, assistant professor of economics at Iowa State University.
To most analysts, the Chinese import target was always a long shot — ambitious, pandemic or no. But Zhang sees one way to get there.
“The only way to do it is to buy some of the products that you would otherwise buy from other countries and now buy from the U.S.,” Zhang said.
That would mean the government butt into markets, which the free-trade deal was designed to avoid. If the agreement goes kaput, as Trump now threatens, he’d put more tariffs on Chinese stuff coming here.
“Putting tariffs on consumer goods and other things we would want people to be buying to help the economy get back on its feet doesn’t seem like the right domestic economic decision,” said Lynn Fischer Fox, a trade lawyer at Arnold & Porter. Not to mention the stock market potentially flipping out.
COVID-19 Economy FAQs
Millions of Americans are unemployed, but businesses say they are having trouble hiring. Why?
This economic crisis is unusual compared to traditional recessions, according to Daniel Zhao, senior economist with Glassdoor. “Many workers are still sitting out of the labor force because of health concerns or child care needs, and that makes it tough to find workers regardless of what you’re doing with wages or benefits,” Zhao said. “An extra dollar an hour isn’t going to make a cashier with preexisting conditions feel that it’s safe to return to work.” This can be seen in the restaurant industry: Some workers have quit or are reluctant to apply because of COVID-19 concerns, low pay, meager benefits and the stress that comes with a fast-paced, demanding job. Restaurants have been willing to offer signing bonuses and temporary wage increases. One McDonald’s is even paying people $50 just to interview.
Could waiving patents increase the global supply of COVID-19 vaccines?
India and South Africa have introduced a proposal to temporarily suspend patents on COVID-19 vaccines. Backers of the plan say it would increase the supply of vaccines around the world by allowing more countries to produce them. Skeptics say it’s not that simple. There’s now enough supply in the U.S that any adult who wants a shot should be able to get one soon. That reality is years away for most other countries. More than 100 countries have backed the proposal to temporarily waive COVID-19 vaccine patents. The U.S isn’t one of them, but the White House has said it’s considering the idea.
Can businesses deny you entry if you don’t have a vaccine passport?
As more Americans get vaccinated against COVID-19 and the economy begins reopening, some businesses are requiring proof of vaccination to enter their premises. The concept of a vaccine passport has raised ethical questions about data privacy and potential discrimination against the unvaccinated. However, legal experts say businesses have the right to deny entrance to those who can’t show proof.
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